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Shopping without borders

Cross-border shopping by Zimbabweans in South Africa’s border town of Musina

Nedson Pophiwa,

HSRC-DGSD Programme/ PhD UKZN Economic History 10 November 2015

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Definition of CBS

• Cross-border shopping is categorised as a form of “out-shopping”

which occurs when consumers travel outside their local area, cross a national boundary into an adjacent country, to shop (Kuncharin and Mohamed 2013).

• Due to advancements in technology this may involve purchases

being made through distance shopping (internet, phone, etc.) from sales representatives in another country (Spierings and van der Velde 2008; 498).

• A localised definition in the South African context can be found in
• ne local study which defines cross-border shoppers as “foreigners

who come to South Africa for short periods of time, with shopping as their main purpose of travel… Their activities range from the purchase of low-end consumer goods for use by friends and family in their home countries to entrepreneurial buying of crafted and manufactured goods for resale in their home countries and South Africa.” (Strategic Business Partnerships 2006)

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ICBT in South Africa

Informal cross-border traders can also be cross-border shoppers as this categorisation in the case of South Africa by Sally Peberdy (2002: 36) shows;

i. Traders who travel to South Africa for short periods (1-4 days) to buy goods (usually from formal sector retail and retail and wholesale outlets and farms) to take back to their home country to sell. These goods are sold in markets, on the street, and to formal sector retail outlets and to individuals. This category of trader appears to be the most numerous and can be called “shoppers”; ii. Traders who travel to South Africa for longer periods (1 week to 2 months) who carry goods to sell in informal and retail markets. The profits are then invested in buying goods which are then taken back to their home countries for sale in informal and formal sector markets; iii. Traders who travel across three or more countries including South Africa, buying and selling as they go; iv. A seemingly small category of traders who only bring goods from their home country to sell in South Africa without taking goods out for sale in their home country; and v. South Africans who take goods to sell in other Southern African countries in markets, on the street and to formal sector retail outlets (Ibid)

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Research Context

• Cross-border shopping (CBS) is a phenomenon largely studied by tax

experts, economists, tourism experts and related disciplines seeking to understand trends and patterns that shape this type of out-shopping (Dascher and Haupt 2008; Leal, et al 2010; Subramaniam 2008 ).

• CBS is prominent among various European borders e.g. Danes flocking to

Germany to buy alcoholic beverages more cheaply (Bygvra 1998; Bygvra 2009) and Norwegian consumers purchasing goods highly taxed in their country – notably alcohol and tobacco – in neighbouring Sweden (Beaty et al 2009; Karlsson and Lindgren, 2010).

• Mexicans contribute US$3 billion annually and travel hundreds of miles to

buy products that are cheaper or only available in the United States (Sullivan et al 2012; 599). Americans shop for cheaper medicines in Mexico

• Cross-border shopping is reported as having made Yugoslavs exceptional in

comparison with people living in other communist countries because “Yugoslavs could pride themselves on their first-hand experience and knowledge of all things Western—from the best places to buy long-playing records (LPs) in London to the prices of cappuccino in Venice, ways to hail a taxi in New York, or the best times to go shopping at flea markets in Paris” (Hozic 2012: 617).

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Research Context

• CBS has led to the development of boom towns between Angola

and Namibia where not only the local entrepreneurs but also a significant number of Chinese traders are profiting (Dobler 2008; Dobler 2009; Zeller 2010; Rodrigues 2010).

• Basotho cross daily into border towns astride the Lesotho-South

Africa border to shop, conduct business and utilise social services there (Viljoen and Wentzel 2007; Coplan 2001).

• Mozambican cross-border trade in SA is also prominent (Peberdy

2001) and towns like Nelspruit have experienced boom due to CBS

• Zimbabwean informal cross-border traders have become a

prominent feature in regional trade in SADC (Muzvidziwa 2001; Kachere 2011; Mutopo 2010; Muzvidziwa 2012)

• Zimbabweans crossing the border to shop and consume in Musina

and other South African towns have drawn media attention as well as civil society and few scholarly studies

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Research Questions

1. What factors led to the surge in cross-border shopping by Zimbabweans in South Africa? 2. What is the nature and extent of Zimbabwean cross-border shopping in Musina? 3. What strategies have shoppers employed to navigate risks which impact negatively on their cross-border shopping activities?

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Is Zimbabwean CBS a negative thing?

• The milk in my fridge has a sign on it boasting that it is

"Proudly South African." The cheese, custard, butter, frozen vegetables, fruit juice and mayonnaise have the same sign. The cereals in the cupboard have labels announcing that they are "Proudly South African" so does the rice, coffee and

• biscuits. It's the same in the pantry cupboard where the tins,

soup, noodles, washing powder and cleaning products all say ‘Made in South Africa.' This is how Zimbabwe greets 2015. Cathy Buckle, Zimbabwean writer and blogger

• “How can we, as a nation, import water, toothpicks, plastics,

to mention but a few? Surely, we can do better than this,” Mike Bimha, Minister of Industry and Commerce, Zimbabwe

• “All sectors of business are thriving at the moment. From the

informal street vendors to the most sophisticated, businesses are doing extremely well." Chairperson of the Musina Chamber of Commerce, Jason Rana

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Do they shop just for survival?

• CBS is not just a survival strategy for Zimbabweans but consumerism is an underlying

aspect to it

• It is not just the poor who shop in South Africa or elsewhere in the world. The ruling elite

are often reported as splurging on shopping in other countries.

• In a spat on social media site Twitter, former South African reserve bank governor Tito

Mboweni tweeted about the hypocircy of Prof Jonathan Moyo, a staunch ZANU PF MP "Jonathan Moyo irritates me. Writes fairy tales‚ shops in SA for basic things and talks such rubbish whilst his people suffer. Prof my foot!”

• Western media labelled Grace Mugabe, “Gucci Grace”, “First Shopper” for her lavish

lifestyle of shopping sprees when her family travelled abroad especially to Europe.

• In 2014 the ruling party ZANU PF aligned Members of Parliament together with opposition

MDC MPs made news when they were “stranded” after missing their plane during a shopping trip in China.

• Even poor cross-border shoppers have consumerist motives in their shopping e.g.

– For a long time, I never understood why struggling Zimbabwean women would go to Botswana or South Africa with doilies, sell them there and then, among other things, use their hard won foreign currency, to buy bottles of whisky which they would simply display in their cabinets. Many of these women and their families do not drink whisky. My own mother bought a punch-set in South Africa which, to my knowledge, has never been used. In some sense, the consumption patterns are an expression of what the women want to be and what narrative stories they wanted to live. (Kaulemu n.d: 21)

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Methods

• 1. Literature review: I consulted vast sources of

literature both secondary sources and primary archival data (Pretoria Archives), reports on cross-border commerce and tourism statistics.

• 2. Semi-structured interviews: Conducted 43 so far

with shoppers, transport operators, shop assistants in Musina and at the border post. Shoppers were intercepted after shopping or in their places of rest or temporary accommodation.

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Additional Data Collection Methods

• Fieldwork notes/diary: I kept a research diary where I noted

down all the events and observations that I was making. All informal conversations were recorded in that diary and names of places, and many other pointers that would keep me informed about the research.

• Participant observation: Very useful method which I realised

was the only way to gain access into insightful information

• n issues that respondents would not easily share with me. I
• bserved shoppers arriving in Musina, the routes they took

and followed them to the CBD and observed the shops they entered and recorded their purchases etc.

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Explaining the origins of CBS in Post- 1980 Zimbabwe

• CBS has its roots in ambitions of housewives in the 1980s who wanted to supplement

their husbands’ meagre incomes and boost household income

• These women would take crafts and doilies to SA for sale and on their return home

would buy household goods, groceries and electric goods for resale

• They soon established a niche in a time when forex regulations were stringent in
• Zimbabwe. White Zimbabweans held the monopoly of travel to SA for tourism purposes

during the colonial period

• In the 90s due to structural adjustment, CBS becomes a key livelihood strategy as men

were retrenched & the scourge of HIV/AIDS led to the feminisation of households

• Late 90s saw the entrance of men as cross-border shoppers bringing diversity into the

goods that were being purchased

• CBS becomes a supply route for informal economic activities in Zimbabwe (flea markets,

niche supply routes e.g. for car spares etc.)

• Shortages in the 2000s elevated CBS into a supply route for basics / necessities so it

became a survival strategy. This is the period CBS surged to unprecedented levels

• The adoption of the US$ in 2009 has increased buying power of Zimbabweans
• The efficient issuing of passports since 2009 has eased travel for shoppers

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What is the nature and extent of Zimbabwean cross-border shopping in South Africa?

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Zimbabwean tourist arrivals in South Africa 2004-2014

Source: South Africa Annual Tourism Reports 2004-2014 2168136 1976152 1847974 1553088 1513714 1227631 1269773 964027 980571 773991 551113 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

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Table: Purpose of visit to South Africa from Zimbabwe: 2007 to 2013

Holiday Shopping -Personal Shopping- Business Business Traveller Business Tourists Medical VFR Religion Other 2014 8.0% 52.9% 3.9% 0.6% 9.2% 3.3% 18.6% 1.0% 2.7% 2013 10.7% 45.1% 9.9% 6.3% 5.9% 3.0% 15.5% 0.6% 2.9% 2012 16.7% 33.7% 9.4% 7.8% 4.4% 2.4% 20.8% 1.2% 3.6% 2011 25.8% 26.6% 6.0% 5.8% 5.9% 3.9% 22.1% 3.1% 2010 24.3% 33.5% 4.6% 8.0% 4.3% 3.4% 18.8% 2.8% 2009 27.8% 33.9% 7.5% 9.1% 3.0% 3.7% 22.0% 7.3% 2008 24.8% 47.8% 4.0% 6.7% 6.7% 1.6% 12.1% 1.1% 2007 32.7% 32.4% 3.0% 7.8% 2.3% 1.7% 18.5% 1.2%

Source: South Africa Annual Tourism Reports 2007-2014 14

Typology of Zimbabwean shoppers in Musina

• High-end versus low-end shoppers/ Individuals vs. traders / borderland
• vs. hinterland shoppers
• Borderland shoppers from Beitbridge, Zimbabwean side who cross to

buy daily basics as well as some electronic gadgets depending on their

• purpose. Often a man or woman carrying a bag on their head and

walking on foot instead of using the taxis or long distance buses.

• Petty traders or informal cross-border traders who come to shop for

goods to resale in Zimbabwe, ranging from clothes, to alcohol, furniture

• etc. they either have a little shop to resale the goods or have ready retail

customers waiting for the stock or they sell the stock from their houses.

• Family shoppers: usually travel by car to shop in Musina. they shop for

the household necessities, luxury items, clothes etc. Every family member in the car helps to increase the amount of goods that can be bought on duty-free

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The organisation of cross-border shopping

• Border

shoppers just after arrival waiting for local shuttles to ferry them to the city centre, 05h30

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The organisation of cross-border shopping

• Border

shoppers loading their goods on a long distance bus (13h00) ready to leave for Bulawayo

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A shopper’s value addition

Cross-border shopper

Local taxi from her house R10 (+return) Long-distance bus to Musina R700 + return Local taxi in Musina R20 + return Musina shops (SA wholesale, retail) R2000-R15000 Leaves VAT unclaimed at SARS +/- R300 - R5000 Pays duty to ZIMRA (or bribes) +/- R200 – R7000

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Shopping hotspots in Musina

• There is evidence that Musina is experiencing spatial transformation in the area of

retail space over the past decade owing partly to the boom in cross-border shopping: – Increased investments by South African capital over the past few years e.g. The Great North Road Plaza in Musina was first opened in October 2009 (later sold to Investec Property Fund for R145 million in 2011) – Prominent SA retailers have also moved in selling the ‘big brands’ e.g. Ellerines, The Bed Shop and supermarket chains such as Shoprite, Woolworths and Spar. – Automotive service centres such as Supa Quick, HiQ and Musina Toyota to mention a few which also service both locals and Zimbabweans who bring their cars for service. – There are a number of locally owned shops selling premium electrical goods like Jason Electrical and Lion King which belong to South African citizens who have lived in Musina for decades. – Downtown Musina is now densely populated with shops that sell general merchandise mostly imports from China and other parts of Asia. These shops are more recent having been built in the past few years. They are mostly owned by East African merchants (Ethiopians, Eritreans, and Somalis) and Asians (Chinese, Bangladeshi, Pakistani, etc.). – The China-Musina Mall is also built adjacent to the N1 and houses a number of shops and stalls selling general merchandise including furniture, clothes, blankets, kitchenware etc. opened in 2010 (R600 million-project )

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Smuggling occurs…but what drives it?

• Some goods have been banned or prohibited such that they

attract 40% duty. Food stuffs such as eggs, chicken, potatoes and the like. In some cases where travellers have failed to pay the tax they have been confiscated

• Other products have also been placed under strict

restrictions because they threatened local industries for example blankets and cooking oil (fish oil)

• People smuggle because they want to exceed their

maximum tax rebate allowance (US$300)

• Sometimes shoppers without passports have no choice but

to smuggle because they cannot legally declare and pay for goods, they have to cross the border through clandestine means.

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How do they smuggle?

• As individual they may do the following;

– Wear new clothes that they have purchased and pack the old ones carefully in their luggage – They conceal all goods that may require extra charges in vehicles that they travel with or other containers – Under-invoice, by asking shop owners to provide them with receipts that price the goods cheaper than they bought them

• Sometimes they hire individuals to smuggle on their behalf;

– Middlemen such as runners/ porters, bicycles, truck drivers, bus drivers are usually there to help with the smuggling of goods especially crossing into Zimbabwe without detection by authorities or they broker between shoppers and officials from ZIMRA – ZIMRA agents also create a conducive environment for smuggling because they delay travellers and in turn the travellers tip them so that they are allowed to cross without the bus being fully searched/ inspected.

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• Truckers queuing to

cross the border to Zimbabwe, shoppers sometimes use these to smuggle goods across

• Bicycle porter just

finished loading 2 bags of grocery items and will take them across to the Zimbabwean side on behalf of a client. Charges from about R200 upwards

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A risky affair

• Although most of these livelihoods bring food to the table they've got a lot of insecurity and

in the event of death, surviving family members have nothing to fall back on,

• Cost/location/condition of accommodation
• Discrimination/harassment due to xenophobia
• Harassment by police
• Transport problems : Breakdowns for days mean additional expenses incurred etc.
• Tax and tax refund problems
• Bad service from other stores and general public
• Border and customs control difficulties / Import duty procedures
• Traders can run losses due to miscalculation or customers failing to pay on time or at all
• Crime is rife in Musina
• Confiscation of goods is rife especially if there's change in border staff
• Road accidents are on the increase especially on the Zim side
• Families often deal with loneliness hence the choices of Musina which is a bit nearer
• Harassment and extortion by border officials has been reported frequently

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Conclusion: Shopping without borders

• Cross-border shopping by Zimbabweans in SA knows

no borders;

– In terms of scale and magnitude – Goods procured are of all kinds incl perishables, electric goods etc. in response to the local markets – Involves Zimbabweans of all categories, different income groups, male, female, traders etc. – Whilst survival has been a key motive, CBS is also motivated by consumerism, expensive labels & drinks are part of the shopping lists – Shoppers are not deterred by the existence of a restrictive international border, they know how to traverse it at any given time

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